Foreign investments registered with BSP yield net inflows in July 2023

Transactions on foreign investments registered with the Bangko Sentral ng Pilipinas (BSP), through authorized agent banks (AABs), in July 2023 recorded net inflows of US$962 million resulting from the US$1.6 billion gross inflows and the gross outflows of US$614 million for the month.

The recorded net inflows are an improvement from the previous month’s net inflows amounting to less than US$1 million.

The US$1.6 billion registered investments for the month are higher by US$687 million (or by 77.2 percent) compared to the US$889 million recorded in June 2023.

Majority of registered investments were in Peso government securities (US$996 million or 63.2 percent) while about 36.8 percent were in PSE-listed securities (US$580 million) [most of which were investments made in: (a) banks; (b) property; (c) food, beverage and tobacco; (d) holding firms; and (e) transportation services].

The remaining investments [less than one (1) percent] were in other instruments.

The top five (5) investor countries for the month were the United Kingdom; United States (US); Singapore; Luxembourg; and Germany with combined share to total at 85.7 percent.

The US$614 million gross outflows for the month were lower by US$275 million (or by 30.9 percent) compared to the gross outflows recorded for June 2023 (US$889 million).

The US remains to be the top destination of outflows,  receiving US$400 million (or 65.0 percent) of total outward remittances.

Year-on-year, registered investments in July 2023 are higher than the US$681 million recorded in July 2022 by US$896 million (or by 131.6 percent), while gross outflows decreased by US$169 million (or by 21.6 percent) vis-à-vis the gross outflows posted in July 2022 (US$784 million).

The US$962 million net inflows in July 2023 were a reversal from the US$103 million net outflows recorded for the same period a year ago.

Year-to-date transactions (01 January to 31 July 2023) for foreign investments registered with the BSP, through AABs, yielded net inflows of US$158 million which is smaller compared to the US$675 million net inflows noted for the same period last year (01 January to 31 July 2022).

Registration of inward foreign investments delegated to AABs by the BSP is optional under the rules on foreign exchange (FX) transactions.

It is required only if the investor or its representative will purchase FX from AABs and/or their subsidiary/affiliate foreign exchange corporations for repatriation of capital and remittance of earnings that accrue on the registered investment.

Without such registration, the foreign investor can still repatriate capital and remit earnings on its investment but the FX will have to be sourced outside the banking system.